In 1865, Britain and Bhutan signed the Treaty of Sinchulu, under which Bhutan would receive an annual subsidy in exchange for ceding some border land. Under British influence, a monarchy was set up in 1907; three years later, a treaty was signed whereby the British agreed not to interfere in Bhutanese internal affairs and Bhutan allowed Britain to direct its foreign affairs. This role was assumed by independent India after 1947. Two years later, a formal Indo-Bhutanese accord returned the areas of Bhutan annexed by the British, formalized the annual subsidies the country received, and defined India's responsibilities in defense and foreign relations. A refugee issue of some 100,000 Bhutanese in Nepal remains unresolved; 90% of the refugees are housed in seven United Nations Office of the High Commissioner for Refugees (UNHCR) camps. Maoist Assamese separatists from India, who have established themselves in the southeast portion of Bhutan, have drawn Indian cross-border incursions.

National Day (Ugyen WANGCHUCK became first hereditary king), 17 December (1907)

Constitution:

no written constitution or bill of rights; note - the King commissioned a committee to draft a constitution in 2001, but has yet to be approved

Legal system:

based on Indian law and English common law; has not accepted compulsory ICJ jurisdiction

Suffrage:

each family has one vote in village-level elections

Executive branch:

chief of state: King Jigme Singye WANGCHUCK (since 24 July 1972) elections: none; the monarch is hereditary, but democratic reforms in July 1998 grant the National Assembly authority to remove the monarch with two-thirds vote head of government: Chairman of the Council of Ministers Lyonpo Khandu WANGCHUK (since 8 August 2001) cabinet: Council of Ministers (Lhengye Shungtsog) nominated by the monarch, approved by the National Assembly; members serve fixed, five-year terms; note - there is also a Royal Advisory Council (Lodoi Tsokde), members nominated by the monarch

Legislative branch:

unicameral National Assembly or Tshogdu (150 seats; 105 elected from village constituencies, 10 represent religious bodies, and 35 are designated by the monarch to represent government and other secular interests; members serve three-year terms) elections: local elections last held November 2002 (next to be held NA 2005) election results: NA

Judicial branch:

Supreme Court of Appeal (the monarch); High Court (judges appointed by the monarch)

none; note - Bhutan has a Permanent Mission to the UN; address: 2 United Nations Plaza, 27th Floor, New York, NY 10017; telephone [1] (212) 826-1919; the Bhutanese mission to the UN has consular jurisdiction in the US consulate(s) general: New York

Diplomatic representation from the US:

the US and Bhutan have no formal diplomatic relations, although informal contact is maintained between the Bhutanese and US Embassy in New Delhi (India)

Flag description:

divided diagonally from the lower hoist side corner; the upper triangle is yellow and the lower triangle is orange; centered along the dividing line is a large black and white dragon facing away from the hoist side

Economy

Bhutan

Economy - overview:

The economy, one of the world's smallest and least developed, is based on agriculture and forestry, providing the main livelihood for more than 90% of the population. Agriculture consists largely of subsistence farming and animal husbandry. Rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive. The economy is closely aligned with India's through strong trade and monetary links and dependence on India's financial assistance. The industrial sector is technologically backward, with most production of the cottage industry type. Most development projects, such as road construction, rely on Indian migrant labor. Bhutan's hydropower potential and its attraction for tourists are key resources. The government has made some progress in expanding the nation's productive base and improving social welfare. Model education, social, and environment programs are underway with support from multilateral development organizations. Each economic program takes into account the government's desire to protect the country's environment and cultural traditions. Detailed controls and uncertain policies in areas like industrial licensing, trade, labor, and finance continue to hamper foreign investment.